Updated on February 6th, 2025 by Felix Martinez
When it comes to dividend investing, the Dividend Aristocrats are the “cream of the crop.” The Dividend Aristocrats are a group of stocks in the S&P 500 Index, with 25+ consecutive years of dividend increases.
There are just 69 companies that have attained Dividend Aristocrat status.
As a result, it is not easy to join the Dividend Aristocrats list. With that in mind, we created a downloadable list of all 69 Dividend Aristocrats, along with important metrics like dividend yields and price-to-earnings ratios.
You can download a free copy of the Dividend Aristocrats list by clicking on the link below:
Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.
There are thousands of dividend stocks to choose from, but the Dividend Aristocrats are a unique group. The Dividend Aristocrats have profitable businesses, and the ability to grow their profits over time.
This allows them to withstand recessions, and continue increasing their dividends each year.
Franklin Resources (BEN) has increased its dividend for 45 consecutive years, and the stock has a high dividend yield of 6.2%.
Franklin Resources has endured a few tough years. Still, given the company’s track record of dividend growth and current yield, Franklin Resources is an attractive stock for income investors.
Business Overview
Franklin Resources is an investment management company. It was founded in 1947 in New York, by Rupert H. Johnson Sr., who had previously managed a Wall Street brokerage firm. He named the company after Benjamin Franklin, the founding father who was viewed as a symbol for frugality, saving, and wise investments.
Today, Franklin Resources manages the Franklin and Templeton families of mutual funds.
The past few years have been difficult for Franklin Resources. Franklin Resources was slow to adapt to the changing environment in the asset management industry. The explosive growth in exchange-traded funds and indexing investing surprised traditional mutual funds.
ETFs have become very popular with investors due in large part to their lower fees than traditional mutual funds. In response, the asset management industry has had to cut fees and commissions or risk losing client assets.
Growth Prospects
Despite the difficult operating environment, there are reasons to be optimistic about the company’s long-term growth. First, the U.S. is an aging population. There are thousands of Baby Boomers retiring every day. Combined with rising life expectancy, there is a great need for investment planning for those in or nearing retirement.
Franklin Resources is still making investments in driving long-term earnings per share growth. This past year the company funded two acquisitions and four investments and bought back stock fairly aggressively. In particular, the company has been strategically expanding into alternative investments in order to generate an alternative growth vertical. Some of these include Legg Mason, Lexington Partners, and Alcentra.
On January 31st, 2025, Franklin Resources reported net income of $163.6 million, or $0.29 per diluted share, for the first fiscal quarter ending December 31, 2024. This marks a significant improvement from the previous quarter’s net loss of $84.7 million, though it remains lower than the $251.3 million net income recorded in the same quarter last year. Operating income reached $219.0 million, reversing the previous quarter’s operating loss of $150.7 million and exceeding last year’s $206.5 million. Adjusted net income stood at $320.5 million, with an adjusted diluted earnings per share of $0.59, showing little change from the previous quarter but slightly declining from the $0.65 reported in the prior year.
The company saw positive momentum in several key areas despite challenges in market conditions. Long-term inflows increased by 34% compared to the prior year, totaling $17 billion in equity, multi-asset, and alternative investments. Excluding Western Asset Management, Franklin Resources achieved long-term net inflows of $18 billion, with gains across all asset classes. The institutional pipeline of won-but-unfunded mandates rose by $2.3 billion to $18.1 billion, reflecting broad investor interest. Additionally, alternative investment fundraising generated $6 billion, including $4.3 billion in private market assets. The company also launched its first evergreen secondaries private equity fund in January, raising $900 million in assets.
Total assets under management (AUM) stood at $1.58 trillion at the end of the quarter, reflecting a $102.9 billion decline primarily due to market fluctuations and long-term net outflows of $50 billion, largely attributed to Western Asset Management. Cash and investments totaled $6.3 billion, while stockholders’ equity was $13.2 billion. Franklin Resources repurchased 0.3 million shares for $5.8 million during the quarter. Despite industry challenges, the company remains focused on strategic investments, cost management, and enhancing shareholder value, leveraging its extensive global investment capabilities and distribution network.
Investors can reasonably expect 4% annualized earnings-per-share growth over the next five years. Earnings-per-share growth will be driven by revenue growth, mainly due to rising AUM, as well as a boost from share repurchases.
Source: Investor presentation
Competitive Advantages & Recession Performance
Asset management is a highly competitive business, and there are not many competitive advantages in the financial services industry. The ability to retain clients depends largely on performance. If funds perform worse than their benchmarks, clients typically withdraw their funds.
However, Franklin Resources has a few advantages going for it. The first, and perhaps most important, is brand recognition. Franklin Resources has been in operation for over 70 years. That indicates a certain developed expertise and some innate investment abilities. Franklin Resources also still has huge assets under management, allowing the company to offer a wide range of investment opportunities to clients and generate some economies of scale.
Counterbalancing these advantages, Franklin Resources’ most recent recession performance was poor:
- 2007 earnings-per-share of $2.37
- 2008 earnings-per-share of $2.24 (5.5% decline)
- 2009 earnings-per-share of $1.30 (42% decline)
- 2010 earnings-per-share of $2.12 (63% increase)
As you can see, earnings-per-share fell steeply in 2009 during the worst part of the Great Recession. This should come as no surprise since investing is hardly recession-resistant. During recessions, stock markets typically decline. For asset managers, this can lower assets under management and fees. That said, Franklin Resources recovered quickly, and saw earnings jump in 2010 and thereafter.
While the company entered another downturn in fiscal 2020 due to the coronavirus pandemic, the company remained profitable, which allowed it to continue raising its dividend. Therefore, the company has a strong track record of dividend growth through recessions.
Valuation & Expected Returns
We expect that Franklin Resources will earn $2.15 per share in the fiscal year 2025. The stock has a price-to-earnings ratio of 9.6. This is above our fair value P/E estimate of 9.0. A compressing valuation multiple could reduce annualized total returns moving forward.
This valuation headwind will likely be offset by earnings-per-share growth and dividends. Franklin Resources has an attractive dividend yield of 6.2%, and the dividend payout appears to be secure. A breakdown of potential returns is as follows:
- 4.0% earnings-per-share growth
- 6.2% dividend yield
- -0.5% valuation headwind
If Franklin Resources can return to growth, investors buying the stock now could see annualized total returns of 9.7% over the next five years.
Final Thoughts
Franklin Resources’ future growth depends on a strong economy, rising stock prices, and increasing assets under management. Its recent investments in alternative asset managers and aggressive stock buybacks appear to be a good start in that direction.
Franklin Resources could be attractive for income investors with a strong 6.2% dividend yield and a positive growth outlook.
However, given the expected annualized total returns, investors interested in the stock are encouraged to wait for a pullback or an improvement in fundamentals before buying Franklin Resources. As such, the stock receives a hold recommendation.
Additionally, the following Sure Dividend databases contain the most reliable dividend growers in our investment universe:
- The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.
- The Dividend Champions: Dividend stocks with 25+ years of dividend increases, including those that may not qualify as Dividend Aristocrats.
- The Dividend Achievers: dividend stocks with 10+ years of consecutive dividend increases.
- The Dividend Kings: considered to be the ultimate dividend growth stocks, the Dividend Kings list is comprised of stocks with 50+ years of consecutive dividend increases
If you’re looking for stocks with unique dividend characteristics, consider the following Sure Dividend databases:
- The Complete List of Monthly Dividend Stocks: stocks that pay dividends each month, for 12 payments over the year.
- The Blue Chip Stocks List: this database contains stocks that qualify as either Dividend Achievers, Dividend Aristocrats, or Dividend Kings.